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Technology Stocks : Oracle Corporation (ORCL)
ORCL 220.61+0.3%Nov 18 3:59 PM EST
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To: hueyone who wrote (17742)1/6/2003 3:29:56 AM
From: Hardly B. Solipsist  Read Replies (1) of 19079
 
I must be confused. On the one hand you are saying that the performance of ORCL at building wealth is subpar, but the stock-price performance is above par. Yet the calculation of the wealth building just mentions the stock price. Does that mean that you are computing the wealth generated by the company in terms of the stock price?

The only way that I've ever been able to make any sense of "what a company is worth" is in terms of the standard discounted dividends and long-term net asset values, and any high tech company has no net assets that are worth much long-term, and I can't think of any that pay dividends, either. So ultimately I gave up and invested on the optimistic premise that I wasn't the greatest fool in the game.

On the other hand, companies like ORCL do generate a great deal of real wealth, in the sense that by their existence they create things that make civilization work, and they also create a substantial amount of human wealth (just look at the startups formed by ex-ORCL engineers and the companies run by ex-ORCL executives). So while I agree that the sort of analysis that you seemed to be talking about bring out important details about a company, I also think that there is something more going on at companies like ORCL, and that something doesn't seem to me to be well understood by economics...
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